Coffee Break with Tess Scalise

On a perfectly sunny spring afternoon - one that reminds us how lucky we are to live in a state with over 300 days of sunshine a year - we met with Tess Scalise, President of RE/MAX of Cherry Creek for another flavorful edition of DMAR Coffee Break. Enjoying the weather and our beverages on the patio of Aviano Coffee - an authentic coffee house located in the heart of Cherry Creek North - we were inspired by Tess' impressive career in real estate that spans more than 20 years, coupled with her energy and optimism. She shared with us her recruitment strategies, her take on industry challenges including the current lack of inventory, her advice for running a successful brokerage, and much more. ►After you enjoy the full interview, be sure to watch Tess answer even more questions in the Xpresso Round Video.

​DMAR: Can you tell us a bit about yourself and how you got into the real estate industry?

Tess: I first entered the real estate industry in 1993 in Mississippi. My ex-father-in-law owned the rights to a RE/MAX region down there - Alabama, Louisiana, and Mississippi. I ended up essentially running the RE/MAX regional office for the Dixie region. About six months later, he started talking about going into a partnership with someone who owned the RE/MAX mid-state region, which was Oklahoma, Kansas, Arkansas, and the western half of  Missouri. We packed up and moved to Kansas City and I began selling franchises for RE/MAX in Arkansas. The vast majority of my career has been corporate, until the late-2000s.

Then, I was invited to join a company-owned region where I’m originally from - St. Louis, Missouri - so we moved again. I eventually moved up the corporate ladder to run that region, and became an officer for RE/MAX, LLC. In 2002,  RE/MAX, LLC closed down that office and relocated me here… which I was thrilled about! I used to travel to Denver quite a bit and I actually came here in 1994 and went to the world headquarters at that time and even toured the office that I’m now working in.

D: Why did you decide to return to broker management?

T: I had been traveling 75 percent of the time and I had been single while doing so. But I got remarried and although we are both pretty independent, we realized it might be kind of nice to actually spend time together (laughs). I spoke with a friend about getting into brokerage management in Denver and she introduced me to the board of directors of the RE/MAX of Cherry Creek. At that point in time, they were looking for a new president. So we just started the conversation… and a match was made. Now I actually get to live in Denver, as opposed to just having a home in Denver (laughs).

D: Walk us through a day in your life…

T: I typically arrive in the office at 8:30 AM. I make it a priority to walk around the office and talk with the staff. I’ll go in through the front door and talk with Leslie - who works at the front desk - to just see how’s she’s doing and catch up on anything that she needs. I’ll talk with our accounting department and in-house marketing team. I really like to be visible around the office. We have around 100 brokers and, in my opinion, our brokers are my customers, their clients are obviously customers as well, but I like to make sure that I know what’s going on with people. It’s important to say “hi,” recognize them, and just chat with them.    

Then I check my calendar, prepare myself mentally, and then my day really starts.

I really like to be visible around the office. 

D: What do you think are the key ingredients for running a successful brokerage today?

T: I’d say the key ingredient is the ability to establish rapport and relationships. Even though people in the ‘90s were saying that the internet was going to take everybody down… this industry is, and will always be, a relationship industry. People are buying the largest asset they will probably ever acquire, and there has to be a level of trust and respect. I think the ability to develop interpersonal skills, not only with the brokers that I employ but also with their clients, is crucial. When you’re running a brokerage, you have to have an established reputation… people need to trust you. With so much emphasis on online ratings and with information shared online, if that trust isn’t there then the brokerage suffers.      

People are buying the largest asset they will probably ever acquire, and there has to be a level of trust and respect. 

D:  As the Employing Broker of RE/MAX of Cherry Creek, what are your recruitment or hiring strategies?

T: We’re interesting since our business concept is completely different. It’s a group-owned business, so my recruitment strategy is very selective. When I’m inviting somebody to join our company, I’m essentially inviting them to become an owner. So my strategy is by-referral recruitment only. I like to stay in touch with people and develop relationships with them. If our brokers are doing a transaction with a broker outside of our company, I ask our broker how it was and whether that other broker is someone we’d like to invite to be a shareholder in our company. We have a limited number of seats, and following our bylaws we can only have so many shareholders.

Our agents are super productive. They average 17 years of experience and $7 million in volume, and do at least 16 transaction sides. So I need to recruit to that caliber. And it’s not only the production, it’s also their personality. I share with potential recruits our value proposition and company culture. We focus on collaboration, respect, and upholding a high standard of ethics, but we also like to have fun - so they need to share these same values.       

Our agents are super productive. They average 17 years of experience and $7 million in volume, and do at least 16 transaction sides. So I need to recruit to that caliber. 

D: How do you anticipate your brokerage will change in the next two years?

T: We’re evolving. We have a retirement program, so we’re trying to help our brokers transition. We have a number of people who have been with us for 30 years, and so we’re trying to help those who want to slow down and enjoy a better quality of life transition their business to a person of their choosing that matches the needs of their clientele.

In the past couple months, we’ve added 10 new faces to our company. Not all of them are shareholders, some are team members. But as our team leaders start to want to slow down a bit, they’ll mentor their buyer agents and team members to eventually take over their business and then become shareholders of RE/MAX of Cherry Creek.

We’re seeing a changing landscape. When I started with RE/MAX of Cherry Creek two and a half years ago, people were saying, “We need young people.” And now they’re saying, “Who are these people?” (laughs). That’s why we are trying to create ways for people to socialize and get to know one another. We even added a photo roster just so everyone can recognize each other.   

We’re seeing a changing landscape. When I started with RE/MAX of Cherry Creek two and a half years ago, people were saying, “We need young people.” And now they’re saying, “Who are these people?” 

D: Speaking of the industry “needing young people,” do you think there are any advantages for buyers or sellers to work with a newer agent rather than a veteran?

T: Oh, yeah! Absolutely. To me it’s not the age, it’s the relationship. If you’re buying a home and you relate better to a younger person or you relate better with an older person, that’s your choice. It’s who you relate best to. Then it’s up to that broker to find ways to relate to you. Age is not an issue. We have people who are 80-years-old in our company, and we have people who are 20-something.

In order to adapt to the market, you have to employ any age. 

The last I heard, the average age of a REALTOR® was 55, and the industry is trying to trend that down so we’re not all dinosaurs and still selling real estate. But I think in order to adapt to the market, you have to employ any age.                 

D: What is the biggest challenge you’ve faced in the past year and how did you overcome it?

T: The simple answer is lack of inventory, and there’s no easy way to create more. It is just flat-out a lack of inventory. Certainly the brokers in our office, and probably most of the DMAR members, would prefer it to be a balanced market. It took such a shift from being a buyer’s market at the beginning of 2012, to a seller’s market in the spring and summer of 2013. It just keeps going farther and farther toward the seller’s market range, so we missed that “in-between time…” I think we would all relish the opportunity to have that balanced market where buyers aren’t suffering, and there aren’t these antagonistic situations between buyers and sellers that we unfortunately hear about because the sellers have the upper-hand.   

I think we would all relish the opportunity to have that balanced market where buyers aren’t suffering, and there aren’t these antagonistic situations between buyers and sellers that we unfortunately hear about because the sellers have the upper-hand.    

It’s not only a situation in Denver. I was at an event last week with RE/MAX broker owners from around the country, and we were sharing common strategies and also common laments. So the lack of inventory is an industry-wide issue, although Denver is certainly one of the top markets for it.      

D: With so many people wanting to live in the city and our issue of the current lack of inventory, do you think we’ll see a shift back to the suburbs?

T:  I think it’s already starting just because of the lack of affordable housing in the central-Denver area. And I think that’s a good thing. Last year, brokers who primarily work in central-Denver, showed properties in the suburbs, like Brighton, and expanded their search criteria for their buyers. Buying in central-Denver is expensive, especially for those with high student loans. At some point there needs to be a shift, there needs to be balance. And, naturally, all markets change; typically the cycle is seven to twelve years. If we look at the start of this cycle, it was probably 2012 so we are about four years into it. Well, the population of Denver is predicted to grow by 50 thousand annually, so something’s gotta give, and I think it’s going to be the shift to the suburbs.          

Buying in central-Denver is expensive, especially for those with high student loans. At some point there needs to be a shift, there needs to be balance.     

D: What frustrates you the most about the real estate industry?

T: The lack of education on the part of brokers. Thankfully Colorado has the second highest level of education requirements in the country - I think Texas is number one. But sadly there are states that require less than 10 hours of continuing education. I think Colorado is very progressive because they require that everyone have a broker license before they even start to sell. That’s definitely leading the industry in general. I believe it’s a common lament for those who are selling real estate full-time. The barriers to entry are so low, even in Colorado.   

I think Colorado is very progressive because they require that everyone have a broker license before they even start to sell. That’s definitely leading the industry in general.   

I routinely get five or six calls a month - maybe more than that - from brand-new licensees who want to start in our industry. And it definitely cycles with the trends and the market. There’s a joke that in a good market everyone has their driver’s license, their fishing license, and their real estate license (laughs). When the market starts to slow down people realize that it’s a tough industry to survive in. It’s expensive and there’s a lot of hard work involved.  The people who are doing this for a living work hard, they make a lot of sacrifices, and they earn every commission dollar that they make. When people come to that realization, I think they start to drop-out of the industry. Typically within two years, 80 percent of new licensees are out of the industry.    

D: What advice would you give to newer agents who aspire to be Top Producers in this industry?

T: Join a team. Learn from someone who has been there and done that. Check out their reputation everywhere before you commit to a team and make sure it’s an established team with established systems, a reputation, and a book of business that is relative to what your goals are. So, if you want to work with investors, join a team that specializes in investors. If you want to specialize in residential Wash Park, find a team that specializes in that. But absolutely check out their reputation online before you commit to that.

It’s a growing team environment and it’s especially beneficial for newer agents who need that mentorship to find a team to join. I worry for people who are getting their license and going to brokerages where they’re not going to get the individual attention that they need. I worry for them, for the consumers that encounter them, and even for the REALTORS® who do transactions with them.  

It’s a growing team environment and it’s especially beneficial for newer agents who need that mentorship to find a team to join.   

D: When working with a new client, how would you explain the role of a REALTOR®?

T: First and foremost, the REALTOR® is their advocate. REALTORS® subscribe to a code of ethics that is to the client’s benefit. It ensures a level of professionalism, cooperation, and representation that buyers and sellers really need. Since I’ve been in the industry, the contract has gone from a couple of pages to 20 pages, plus many disclosures. Buyers and sellers need somebody to help them understand what it is that they are becoming obligated to, to walk through the contract with them, and to act as their advocate.        

D: How do you train your brokers to explain the commission that they get to their clients?

T: Brokers absolutely need to be having that conversation well before a contract is signed. Most sellers already have an idea of what the averages are in terms of commission, so I think the conversation is first establishing value - talk about marketing strategy, market knowledge, and just what you bring to the table. Consumers don’t realize the amount of marketing money that is spent (months before a property goes under contract), and the amount of expertise required. If a seller is working with a broker who has 17 years of experience, there is value associated with that.

If a seller is working with a broker who has 17 years of experience, there is value associated with that. 

Frequently those who are able to defend their commissions are also able to get much higher prices for a home. And if they have a track record and can show that, it’s kind of a non-issue.                

D: What piece of technology or platform do you utilize most?

T: Yapmo - it’s our company intranet. We post things all the time like “so-and-so needs an open house” or “don’t forget to get those Lead Based Paint Disclosures signed.” It’s interactive and basically has become our company Facebook.  

D: How do you manage your email inbox?

T: Delete... (laughs). I do employ delete a lot. There are a lot of things that come in - from vendors and outside businesses - so I scan and try to decide if it’s important. Then I prioritize the remaining emails and respond to the ones that are most time critical first. But I also try to make sure that I get to everything that day... I don’t like to leave things unattended at the end of the day because people expect timely responses.

D: We are constantly seeing Denver on national “hot” lists… What makes Denver “hotter” or different from other markets, and do you think that this popularity is going to last?

T: Yes, I think it’s going to last. I think it’s the quality of life and the 300 days of sunshine, that makes Denver attractive. Even though we were hit with the oil industry, Denver has grown so much under the leadership of John Hickenlooper. I was at an event a couple of weeks ago, and he shared that Denver now has more live music venues than Austin or Nashville… I never would have guessed that. But as long as we continue to offer an attractive environment for people to live - with walkable neighborhoods, trails, dog parks, green spaces - I think the popularity will continue. I think marijuana might be playing a part in it as well (laughs).       

... as long as we continue to offer an attractive environment for people to live, with walkable neighborhoods, trails, dog parks, green spaces - I think the popularity will continue. 

 D: What’s the best career advice you’ve ever received?

T: When something seems too overwhelming, the best approach is to break it down into bite-sized pieces and maybe even step away from it so you can wrap your head around it. And then ask questions. Don’t just jump into action. Give it some time and give it the respect that it needs, then start working on it piece-by-piece.   

D: What is your favorite part of your job?

T: I love the personalities in our company. It’s a challenge and it’s also my favorite part about the job. If you work with 100 people - 63 of whom are your partners in the business and are pretty vocal (laughs), and aren’t hesitant to share their input - it’s a collaboration. We all learn from one another. There really isn’t this sense of competition within our office because most of our brokers get 80, 90, or even 100 percent of their business from past referrals. There’s not that friction over whose client that was. It’s just fun. Granted, there are serious times and serious issues but I view our office as a safe haven for brokers. It can be dog-eat-dog on the outside when you’re negotiating in a crazy market like this and fielding 30 offers, many over asking price, but people come into the office and can let their hair down. They know that they can relax, laugh with each other, and lament with each other. I think it’s really that synergy that we enjoy at our company.

D: If you could change anything about your career path, would you? Why or why not?

T: No, I wouldn’t and it’s because I’ve enjoyed my career path. I’m a glass-is-half-full person. I think good comes from all things. I’ve certainly been through tough times, as we all have, and those are the times when I’ve grown the most. When I’m most challenged, I have to stretch myself a little bit further. Bad stuff, hard stuff… that builds character.   

I’ve certainly been through tough times, as we all have, and those are the times when I’ve grown the most. 

But I wouldn’t change anything. A lot of what I do and the decisions I make on a day to day basis, make up my path. But I also realize that a lot of this is out of my control. Let it be what it is, step away from it, and it’ll probably work itself out eventually.  

D: How do you deal with stress?

T: I have three things that I love to do on my days off: read, run, and paint. I’m typically reading three to five different things at any given time. I love it, I love to stay challenged, and it brings my stress level down. Running is essential, I just love to run. I have a hard time finding time to do it, but when I don’t make time for it I can just feel my teeth clenching. I love painting, too. On my perfect day I’d read, run, and paint - all in the same day.

D: What is your favorite Denver neighborhood?

T: Wash Park. I love the mature trees, the park itself, Gaylord Street… There are so many little niches and fun places to explore.

D: What do you think will be the next up-and-coming neighborhood in Denver?

T: Sloan’s Lake. Several of our brokers are invested in Sloan’s Lake, some of them live there. I think the property values are increasing more so than other areas, percentage wise. It’s a fantastic neighborhood.

D: How would you describe your relationship with coffee?

T: In this day in age, this might be frowned upon… but when I was three years old I had a mini rocking chair and I would sit next to mom and she would give me half coffee, half sugar and we would watch Romper Room together (laughs). That was my first encounter with coffee. I’ve gone on the occasional cleanse, but pretty much I’ve been a ritual coffee drinker since that time. I have coffee every day. We have a Keurig in the office, so I go through my routine, fire up the laptop, and then brew up a cup of coffee. I have tea in the morning at home, coffee when I get to the office, and some days I’ll have coffee in the afternoon.